Cream tea in the mix as Fonterra eyes China beverage market

Fonterra has opened a new application centre in China which will look at adding dairy products like milk, cream, butter and even cream cheese into beverages.

The dairy giant has four other centres in China but the newly opened one in the southern city of Shenzhen will focus on drinks.

Fonterra Greater China chief executive Teh-han Chow said beverages were a developing market in China, especially tea.

"So what we are doing is taking a traditional Chinese product, tea, and combining it with a traditional western product, cream, and it's very popular.

"Something that is big now is a tea macchiato which is tea with a cream topping, so this application centre will develop more innovative products like that."

One beverage on show at the centre opening on Tuesday was a milk ginger tea with sweet potato.

"Dairy consumption in China has traditionally been having a glass of milk so using dairy products in drinks like tea and coffee is relatively new - which creates the opportunity to increase demand for New Zealand dairy products."

Chow said many of China's leading beverage customers are headquartered in Shenzhen, which is why the new centre is based there.

A total of 1434 new kinds of non-alcoholic beverages were launched by key tea and beverage brands in China last year.

"The Shenzhen application centre provides a new platform to explore the diverse use of Fonterra products in beverages and provide innovative application solutions to meet the local needs of Chinese consumers," Chow said.